EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, effective as of July 10, 1996, is entered
into by and between Eco Turf Products, Inc. a Delaware corporation ("EMPLOYER"),
a wholly owned subsidiary of Eco Soil Systems, Inc., a Nebraska corporation
("ECO") and Xxxxxx Xxxxx (the "EMPLOYEE"), with respect to the following facts:
RECITALS
A. EMPLOYER. Employer is a Delaware corporation engaged in the
general business of turf and crop maintenance, products, sales and service.
B. EMPLOYEE. Employee is the originator of the Turf Products
division of Employer's business and is currently being employed to act as the
Vice-President and General Manager of the Turf Products division of Employer.
C. EMPLOYMENT. Employer desires assurance of the continued
association and services of Employee in order to retain his experience, skills,
abilities, background and knowledge, and is therefore willing to engage his
services on the terms and conditions set forth below. Employee desires to be
employed by Employer and is willing to do so on the terms and conditions set
forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows.
1. EMPLOYMENT. The Employer hereby employs Employee and Employee
accepts employment with Employer pursuant to the terms and provisions of this
Agreement.
2. EFFECTIVE DATE. The effective date of this Employment
Agreement shall be as of the date first written above.
3. TERM. Said employment shall continue until the second
anniversary of the date of this Agreement (the "SCHEDULED TERMINATION DATE"),
unless terminated earlier under the provisions of Paragraph 17. Any change in
the Term of this Agreement shall be reflected by a written endorsement attached
to this Agreement and signed by Employee and a duly authorized officer of
Employer.
4. TITLE. Employee's title during the Term of employment shall
be "Vice-President" and "General Manager".
5. DUTIES OF EMPLOYEE. The duties of the Employee during the
Term of this Agreement are to perform those duties ordinarily and necessarily
performed by a Vice-President and General Manager as well as those duties deemed
necessary and appropriate by the Board of Directors of Employer or Eco.
Employee's duties shall include but not be limited to developing the initial
management structure of Turf Products, a division of Employer; continuing to
participate in trade organizations such as ITOIDA, and spearheading a
consolidation plan to locate and gain the interest of additional dealers like
Turf Products, Inc.; formulating a product line to be utilized throughout the
distribution system; overseeing management functions needed to successfully
operate Turf Products, a division of Employer; and reporting to The Golf Group
at Eco. It is envisioned that Employer shall continue to maintain offices in the
Chicago metropolitan area and that Employee's duties shall not require Employee
to travel outside the Chicago metropolitan area more than 20 business days per
calendar year (excluding any days of travel appropriate as a consequence of
Employee's involvement with ITOIDA).
6. MATTERS REQUIRING CONSENT OF BOARD OF DIRECTORS. The Employee
shall not, without specific approval of the Employer or its President, do or
contract to do any of the following:
a. Borrow on behalf of Employer sums exceeding $2,500.
b. Purchase capital equipment or make expenditures for
amounts in excess of the amounts budgeted by the Employer.
c. Do any act which would or could subject Employer to
any liability (provided that the foregoing shall not be construed as prohibiting
Employee from taking any acts undertaken in the ordinary course of Employer's
business, in good faith, and in accordance with reasonably prudent business
practices).
7. DEVOTION TO EMPLOYER'S BUSINESS. Employee shall devote such
of his time as is appropriate for a position of this type (as compared to
customary commercial practices) toward the satisfactory performance of his
duties for Employer.
8. COMPETITIVE ACTIVITIES; COVENANT NOT TO COMPETE. During the
Term of this Agreement and for a period of three (3) years after its
termination, the Employee will not directly or indirectly solicit business from,
engage in business with, or divert business from any of ECO's or Employer's
current or future customers (including without limitation any former customers
of Turf Products, Inc.), and that he will not directly or indirectly, either as
an employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner with the business of the Employer, Eco or any other division of
subsidiary thereof. Such agreement not to compete shall include such activities
in any country, state or county, in which Employer, Eco, or any other division
or subsidiary thereof conducts business.
The parties intend that this covenant not to compete be
construed in the broadest possible manner. Each series of separate covenants and
agreements, one for each city, county, state, political subdivision of each
state, and country, in which Employer, Eco or any other division or subsidiary
thereof. If any court should rule that the territorial scope of this covenant
not to compete is over broad, and that any city, county, state, political
subdivision of any state, or country, specified is not permissibly within the
scope of the covenant not to compete, this covenant not to compete shall be
narrowed so that its territorial scope would be limited to the maximum
geographical area permitted by law, and shall remain effective and enforceable
with respect to each other specified city, county, state, territory and country.
If any provision of this Agreement is held to be unenforceable
or invalid by a court, the invalid or unenforceable provision shall, if
possible, be construed narrowly so as to be enforceable to the maximum extent
permitted by law. If the court cannot or will not narrow the time, scope or
effect of the unenforceable or invalid provision so as to make it enforceable
and valid, the offending provision shall be deemed severed from this Agreement,
and the remainder of this Agreement shall remain in full force and effect.
Employee acknowledges that the violation of the terms of this
Section 8 would be detrimental and cause irreparable injury to Employer and Eco
which could not be compensated by money damages. Employee agrees that an
injunction from a court of competent jurisdiction is the appropriate remedy for
these provisions, and consents to the entry of an appropriate judgment enjoining
Employee from violating these provisions in the event there is a finding of a
breach.
Notwithstanding the foregoing provisions of this Section 8, if
either Employer or ECO shall fail to remedy a material breach by either of them
of any covenant set forth in a Transaction Agreement within 30 days after
Employee delivers a written notice to Employer or ECO describing in reasonable
detail the nature of such material breach, then from and of the end of said
30-day period the provisions of this Section 8 shall have further force or
effect.
9. TRADE SECRETS. The parties acknowledge and agree that during
the term of this Agreement Employee shall have access to and become acquainted
with information concerning operations and products of Employer and Eco and that
such information constitutes Employer's trade secrets. The Employee specifically
agrees that he shall not misuse, misappropriate, or disclose any such trade
secrets, directly or indirectly, to any other person or use them in any way
during the term of this Agreement or at any time thereafter.
10. BASE COMPENSATION. The compensation to be paid to Employee
during the Term shall be as follows:
a. During the term hereof, Employee shall receive annual
compensation of One Hundred Fifty-Five Thousand Dollars ($155,000), payable in
equal monthly installments of Twelve Thousand Nine Hundred Sixteen and 67/100
Dollars ($12,916.67). The monthly installments shall be payable one-half (1/2)
on the first day of each month and one-half (1/2) on the fifteenth day of each
month.
b. Any change in the base compensation shall be
reflected by a written endorsement attached to this Agreement and signed by
Employee and a duly authorized officer of Employer.
11. INCENTIVE COMPENSATION. Employee shall be entitled to
incentive compensation as follows:
A. STOCK INCENTIVE PROGRAM. At some point in the
future, Employee may be entitled to participate in Eco's stock incentive program
and would do so based on the terms and conditions as spelled out in the proposed
Non-qualified Stock Option Plan, a copy has been provided to Employee. Employer
and Eco reserve the right to amend or terminate such non-qualified Stock Option
Plan, in their sole discretion.
B. BONUS PERFORMANCE. One of the duties that Employee
has is to locate other suitable dealers similar to Turf Products, Inc. who would
be interested in joining Eco on a basis similar to that of Turf Products, Inc.
In an effort to encourage the peak performance of Employee in this area,
Employer will grant, and Employee shall receive, an option to purchase 25,000
shares of Eco for each dealer listed on Exhibit "1" attached hereto which:
(i) Employee locates;
(ii) is approved of by the Board of Directors of
Eco, in its sole and absolute discretion, and
(iii) is able to complete a purchase, merger or
other form of consolidation with Eco, provided such purchase, merger or
other form of consolidation is closed within 90 days after termination
of this Agreement. Employee shall earn and receive such options upon
the closing of any such transactions. Whether a particular dealer is a
suitable candidate for this purpose is a decision to be made by, and is
within the sole discretion of, the Board of Directors of Eco. The
option price for such option shares shall be determined based on the
then current fair-market value of such shares at the time of closing of
each respective purchase, merger or other form of consolidation with
each dealer that has been presented by Employee and approved of by the
Board of Directors of Eco. Each such option shall terminate on the
earlier of four (4) years after issuance thereof and six (6) months
after termination of Employee's employment hereunder.
C. CASH BONUS. Employee further shall be eligible for
an annual cash bonus of $50,000, which shall be determined and paid for each
year during the term hereof, if at all, as soon as reasonably possible following
each anniversary of the commencement date of the employment hereunder. The
requirements to be satisfied in order to achieve said bonus for the first year
shall be determined by Employer and Employee in good faith within 30 days after
the date of the commencement of the term hereof, and the requirements to be
satisfied in order to achieve said bonus for the second year shall be determined
by Employer and Employee in good faith within 30 days after the start of the
second year of the term.
D. SURVIVAL. Except as otherwise agreed in writing by
the parties, in the event of termination of this Agreement pursuant to Section
17.b, 17.c or 17.d,the bonuses payable to Employee pursuant to this Section 11
(with respect to the year of the term during which the termination occurs, or
any prior year) shall continue to be payable following the termination.
12. BUSINESS EXPENSES. The Employer shall promptly reimburse
Employee for all reasonable business expenses within its stated annual budget
and for all other pre-approved business expenses incurred by the Employee on
behalf of the Employer.
13. FACILITIES. The Employer shall provide the Employee with an
office consistent with that which Employee had prior to the merger of Employer
with Eco, appropriate office equipment, supplies, stenographic and other
employee services, and all other facilities and services suitable to Employee's
position and necessary and customary for the performance of his duties.
14. MEDICAL INSURANCE. Employer agrees to provide Employee and
Employee's family at Employer expense with suitable medical insurance
commensurate with what Employee maintained for himself just prior to entering
into this Agreement (provided that Employer shall be entitled from time to time
to modify the terms of such coverage so long as the coverage provided remains
consistent with that generally provided to employees then holding positions of
like responsibility within Eco or any other subsidiaries of Eco).
15. VACATIONS. The Employee shall be entitled to four (4) weeks
vacation time each year for the Term of this Agreement, without loss of
compensation. The Employee may be absent from his employment for vacation at
such time or times as the Board of Directors shall approve. If the Employee is
unable, for any reason, to take the total amount of vacation time authorized
during any year, he may accrue that time or may, in his discretion, receive cash
payment in an amount equal to the amount of annual salary attributable to that
period of time.
16. CAR ALLOWANCE. Employer shall provide Employee with a car by
allowing Employee continued use of the cars now owned. The Employer shall be
responsible for obtaining adequate insurance coverage for the automobile and for
its maintenance.
17. TERMINATION. This Agreement may be terminated in the
following manner:
A. FOR CAUSE. The Employer may terminate this Agreement
upon thirty (30) days written notice if Employee materially breaches this
Agreement or the Agreement and Plan of Merger to which this Agreement is made
an exhibit, habitually neglects the duties he is required to perform or commits
such acts of dishonesty, fraud, misrepresentation or other acts of moral
turpitude as would prevent the effective performance of his duties.
B. WITHOUT CAUSE. This Agreement may be terminated
without cause upon thirty (30) days written notice to the Employee. If Employee
is terminated without cause, he shall be entitled to continue (a) to receive the
scheduled compensation payments contemplated by Section 10.a hereof through the
Scheduled Termination Date, and (b) to receive, at Employer's expense, family
medical insurance coverage through the Scheduled Termination Date on
substantially the same terms as those applying prior to the termination
(provided that Employer shall be entitled from time to time to modify the terms
of such coverage so long as the coverage provided remains consistent with that
generally provided to employees then holding positions of like responsibility
within Eco or any other subsidiaries of Eco).
C. BY EMPLOYEE. The Employee may terminate this
Agreement upon giving sixty (60) days written notice to the Board of Directors.
D. DEATH OR DISABILITY. In the event of Employee's
death or on the continuing incapacitating disability of the Employee for a
period in excess of one (1) year during the term of this Agreement, it shall
terminate immediately.
18. NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally to the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
To Employer: Eco Turf Products, Inc.
c/o Xxxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxx, #000
Xxx Xxxxx, XX 00000
To Employee: Xxxxxx Xxxxx
2 North 000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
19. ARBITRATION. Any controversy between the Employer and Employee
regarding the construction or application of any of the terms, provisions, or
conditions of this Agreement shall, upon the written request of either party
served on the other, be submitted to arbitration in Illinois in accordance with
the provisions of the American Arbitration Association.
20. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to provisions of this Agreement and contains all of the covenants and agreements
between the parties whatsoever. Each party to this Agreement acknowledges that
they have read and understood this Agreement and that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by
either party or anyone acting on behalf of either party, which are not embodied
herein, and that no agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
21. MODIFICATIONS. Any modification of this Agreement will be
effective only if it is in writing and signed by all of the parties.
22. SEVERABILITY. Should any provision in this Agreement be
declared invalid, void or unenforceable, then such portion shall be deemed to be
severable from this instrument and shall not affect the remainder thereof.
23. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
24. BINDING UPON SUCCESSORS. This instrument shall be binding upon
and inure to the benefit of the personal and legal representatives, successors
and assigns, except as restricted in Paragraph 25 below, of the parties hereto
and also upon the heirs, executors and administrators of the individual persons
executing this instrument.
25. NON-ASSIGNABILITY CLAUSE. It is agreed that neither Employee
nor any other designee or successor, other than the estate of Employee, shall
have any right to commute, sell, assign, transfer, encumber or otherwise convey
the right to receive any payments hereunder, which payments and the right
thereto are expressly declared to be non-assignable and non-transferable, and
any attempt to do such shall be null and void.
26. CUMULATIVE RIGHTS. The various rights, options, elections,
powers and remedies of a party or parties to this instrument shall be construed
as cumulative and no one of them exclusive of any others or of any other legal
or equitable remedy which said party or parties might otherwise have in the
event of breach or default in the terms hereof, and the exercise of one right or
remedy by a party or parties shall not in any way impair his rights to any other
right or remedy until all obligations imposed on a party or parties have been
performed.
27. TIME. Time is of the essence of this Agreement.
28. NO WAIVER OF DEFAULT. No waiver of default by any party or
parties hereto shall be implied from any omission by a party or parties to take
any action on account of such default if such default persists or is repeated
and no express waiver shall affect any default other than the default specified
in the express waiver, and that only for the time and to the extent therein
stated. One or more waivers of any covenant, term or condition of this
instrument by a party or parties shall not be construed to be a waiver of any
subsequent breach of the same covenant, term or condition. The consent or
approval by any party or parties shall be deemed to waive or render unnecessary
the consent to or approval of said party or parties of any subsequent or similar
acts by a party or parties.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
EMPLOYER:
ECO TURF PRODUCTS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
EMPLOYEE:
--------------------------
XXXXXX XXXXX
SCHEDULE 1 TO
INDEPENDENT TURF AND ORNAMENTAL
DISTRIBUTORS ASSOCIATION
AgraTurf Searcy, Arkansas
Xxxxxx Chemical Farmington Hills, Michigan
Big Bear Turf Equipment Omaha, Nebraska
Xxxxxx Turf Supply Indianapolis, Indiana
The Xxxx. X. Xxxx Seed Co. Wethersfield, Connecticut
Geo. X. Xxxx & Co., Inc. Florence, Kentucky
Landscape Supply, Inc. Roanoke, Virginia
Lea's Green Xxxxxxx, Inc. Temple Hills, Maryland
Xxxxxxx Turf & Supply Jericho, New York
Metro Milorganite Bedford Hills, New York
X. Xxxxxxx & Son, Inc. Grand Rapids, Michigan
Xxxx Xxxxx Turf Supply Broken Arrow, Oklahoma
Professional Turf Specialties, Inc. Champaign, Illinois
SAJ Turf Federal Heights, Colorado
Sierra Pacific Turf Supply, Inc. Campbell, California
Southeastern Turf Grass Supply Jacksonville, Florida
Southern Agricultural Insecticides, Inc. Palmetto, Florida
Supreme Turf Products Eureka, Missouri
The Terre Company Clifton, New Jersey
Xxxx Farm Equipment Chesapeake, Virginia
Turf & Nursery Supply, Inc. Canton, Ohio
Turfgrass, Inc. South Lyon, Michigan
Turf Specialties Corp. Fort Xxxxx, Indiana
Turf Specialty Londonderry, New Hampshire
Turf Supply Eagan, Minnesota
Westchester Turf Supply Lincolndale, New York
Zimco Supply Sioux City, Iowa
